Re Shields; ex parte Australia and New Zealand Banking Group Ltd

[1994] FCA 515

.~ -

51s 9't

JUDGMENT NO. L -

- jury trial - whether application to

met aaide a bank~ptcy	notice should be tried by a jury
R.	[l9051 5 SR NSW 55

[l9521 QWN 15

RECEIVED \\

03 AUG 1994 1

-	1 loo. 3118 of 1993
1

Re: 8

Judgment Debtore

Ex puter

- Judgmnt Creditor

Em5uu

The Court orders that:

1.    the application for jury trial be dismissed.

1. the debtors pay the creditor's costs of the motion.

M&!m Settlenent and entry or orders are dealt with in
accordance with Order 36 of the Federal Court Rules.

Re: 8

Judgment Debtor6

Ex partea

- Judgmnt Creditor

Two unrepresented judgment debtors, who are husband and wife,

seek, by application dated 12 May 1994, a jury trial of their joint application filed on 16 February 1994 for the setting amide of a joint bankruptcy notice. It is not necessary to set out the grounds for their setting aside application. They occupy four pages of dense type and are not easily susceptible

of	summary .
The debtors and the ANZ Bank (the bank) had already been	engaged in a long history of litigation in this Court when, on
20 August 1993, the bankruptcy notice was issued against them. Time for compliance with the notice by each of the debtors was extended pending the outcome of an appeal against the judgment creating the debt which has since been dismissed. It is at present extended until further order of the Court.
Section 30(3) of the Bankruptcy Act provides that:

I f i n a proceeding before the Court under the Act a ques t ion o f f a c t a r i s e s t h a t a p a r t y d e s i r e s t o have t r i e d before a jury , the Court may, i f it t h i n k s

fit, d i r e c t the t r i a l o f t h a t ques t ion to be had

before a jury , and the t r i a l may be had accordingly

i n the 8- manner a s i f i t -re the t r i a l o f an

i s s u e o f f a c t i n an a c t i o n .

In Re [l9051 5 SR NSW 55 Walker J, faced with a similar

application under the precursor to section 3 0 ( 3 ) , made the
following observations at 55:

A motion l i ke this i s somewhat embarrassing to a Judge. H e can c e r t a i n l y have no wish t o add t o his

r e s p o n s i b i l i t i e s , always great , a burden which h e

can put on the shoulders o f o t h e r s , n o r should he be

des i rous o f concentra t ing i n himself beyond t h e

i n t e n t i o n s o f the L e g i s l a t u r e the func t ions o f both

Judge and jury. But he must be guided by what he

believes	t o	have	been	the	i n t e n t i o n s	o f	the
L e g i s l a t u r e ,	and	where	he	has	a	d i s c r e t i o n	must

exercise i t , n o t c a p r i c i o u s l y , b u t on p r i n c i p l e .

At 57 he concluded:

I n my opin ion the Leg i s la ture intended t h a t a l l

ques t ions	a r i s i n g	i n	a	bankruptcy,	whether	they
would	o therwise	have	been	t r i a b l e a t l aw or	i n

e q u i t y , should be t r i e d i n the same way, namely by

the judge a lone , u n l e s s the Judge himself d e s i r e s a

jury , or he t h i n k s t h a t a p a r t y apply ing for one has

made o u t a case for t h a t mode o f t r i a l

This construction of the legislative provision makes it clear that in bankruptcy proceedings jury trials will be the exception rather than the rule. I agree.

A jury trial involves a great deal of expense and time both to the parties and the Court, as well as considerable inconvenience to the members of the community who constitute the jury. The use of juries in civil matters has steadily declined during this century and is now largely reserved for thome areas where serious imputations are to be made against the character of a party. Like divorce, bankruptcy is no longer regarded as such a matter. In the absence of some very compelling special circumstance, the intention of Parliament

is clearly that bank~ptcy proceedings be heard by a judge.

The factor upon which the debtors rely to put this case in such a special position as to make a jury trial appropriate, mentioned late in their written submissions, is that they

..... have lost complete f a i t h i n the system and a r e very apprehensive about ever g e t t i n g a f a i r t r i a l ,

~e Appl icants feel t h a t a jury t r i a l i s the o n l y

s o l u t i o n .

In their respective affidavits in support of the motion, the debtors say that they

. . . . . have l o s t a l l confidence i n t h e Courts a s we

have been r e j e c t e d o f natural j u s t i c e .

I have some sympathy with the debtors in this matter. It is easy to see how two unrepresented individuals, engaged in a stressful and prolonged dispute through which they have already lost their home and stand to lose even more, could feel quite overwhelmed by what they perceive as the formality and technicality of the legal arguments raised against them. No doubt they feel helpless, and believe that the less technical approach of a jury will serve their interests better than that of a judge. Indeed it is precisely this wariness of the perceived remoteness or aloofness of the judiciary, and a belief in a jury' s human understanding and cornonsense, that has made the jury system so popular in the common law tradition for centuries.

Unfortunately, however, this and the other submissions of the debtors not only fail to raise the exceptional circumstances that are required, but are based on the misconception that in a jury trial questions of law are simply ignored, or left to the jury to ponder unaided. They say at another part of their

submissions that r

The Applicants are very much aware that technical points of law could not be argued in a jury trial. The Applicants can and will, if alloared a jury trial, argue only facts .....

This is mistaken. The fact is that even in a jury trial

questions of law are answered by the judge whose directions of

law the jury is bound to accept. Only questions of fact are left to the jury. In this case the debtors must face and overcome a number of legal impediments before a jury would be permitted to consider the relief they seek. Moreover, resolution of the application to set aside the bankruptcy notice will involve issues of fact as well as law, and issues of mixed fact and law. In Re Coward. Sta~leton v Bradv a

(19521 15, Clyne J declined to accede to a similar

request, partly because

this a p p l i c a t i o n r a i s e s some d i f f i c u l t and

complicated ques t ions o f l a w and mixed f a c t and law.

mny quee t ions o f l a w w i l l a r i s e more or less

in te r spersed w i t h ques t ions o f r e l e v a n t f a c t .

That is clearly the case here as well. Indeed in thie case th. isrues are eignificantly confused by the manner in which they have been presented by the debtore. Distilling from the affidavit6 of the debtors the relevant issues is not a simple task, but the affidavit of Mr Shields in support of the application, filed on 15 March 1994, includes the following

grounde 8

5. Line 01 The amount r e f e r r e d t o here, namely

$139,829.37, has never been shown how it i s

made up. M y w i f e and I a r e d i s p u t i n g this

amount. W e a r e d i s p u t i n g the f a c t t h a t w e o m The Respondents (AN8 Bank) any monies a t a l l (Appeal No. S 1 0 o f 1994). Another important

po in t which must be made here i s t h a t the

property a t Kincumber has besn s o l d . That

amount has NOT been deducted and i t i s a very

s u b s t a n t i a l amount o f $124,000.00 ...

6 . L ine S: The word "THEREOF" does n o t comply t o

Form 4 o f the Bankruptcy Act

I understand it, the allegations of fact implied by these submissions, that the debt has in fact been reduced by the sale of the house, and that the Act requires "therefore" in the place where "thereofn appears on the notice, are undisputed. The bank intends to address these two allegations substantially with the argument that neither defect invalidatem the notice, thus only raising an issue of law. Other grounds for attacking the notice are that the notice does not mhov how the debt is calculated and that the debtors have a claim of set off exceeding the amount of the judgment debt. Theme grounds also raise issues of law rather than or before those of fact, at least in the initial phases.

The debtors have put a great deal of energy into delaying the execution of the bankruptcy notice. Whilst they are undoubtedly entitled to bring such proceedings allowed by the rules as they consider will advance their interests, it is inappropriate in the circumstances of this case that a jury should be constituted to delay it further and drive up its expenme. I dismiss the motion for a jury trial and order that the debtors pay the bank's costs of it.

i era, no n i ~ and the +ve

preceding pages are a true copy of the

Reasons tor Judg

Justice Einfeid

Tbe debtors appeared i n person

C o u n s e l and sol icitors for the	G. Blake instructed by
creditor	Norton Smith h Campany
Date of Hearing	12 May 1994

Written subriseions	27 May 1994
completed
Date of Judgmnt	14 July 1994